Majority
p. 245Edward H. Alcott, Respondent, v. Henry V. Vultee, Appellant.
Headnote
Partnership --- agreement of dissolution, the partner continuing the business' to pay its obligations and, to the outgoing partner a sum, representing his interest therein. —.in an action for an accounting by the latter, a receiver will not be appointed.A partner who has withdrawn from the partnership business, on the dissolution of the partnership by mutual consent, under an agreement that his copartner was to continue the business as long as he should degire, and assume the obligations thereof, and, upon an accounting and appraisement of the assets-, pay to the outgoing partner such sum as should be mutually agreed upon between' them, is not entitled, in an action brought by him to wind up the copartnership - affairs, to have a receiver appointed of its assets, as under such agreement the . assets ceased to be the property of the copartnership, and became that of the continuing partner, whose personal covenant to pay was accepted by the outgoing partner in lieu of his interest therein.
Appeal by the defendant, Henry V. Vultee, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 23d day of June, 1898, appointing a receiver, pendente lite, of-the property of the former firm of Alcott & Vultee.
William S. Maddox, for the appellant.
Robert L. Turk, for the respondent.
This action was brought to wind ‘ up a copartnership which had been dissolved by mutual consent and for a receiver. The partnership was formed by written articles of copartnership, dated March 11, 1897, and by an instrument' in writing, dated Hovember, 1897, the partnership was by mutual consent dissolved. By this agreement of dissolution the plaintiff -withdrew from the busi
p. 246
ness carried on by the copartnership, the defendant to continue the business as long as- he should! desire, and the parties agreeing that an inventory should be taken of the assets of the copartnership and a statement of its liabilities be made. The defendant agreed to assume'and pay the obligations of the copartnership, and upon the accounting being had and the'appraisement being made of the assets of the copartnership, the defendant was to pay over to the plaintiff such sum or sums which should be mutually agreed upon between them; and in pursuance of this covenant, it seems that an inventory of the property of the copartnership and a statement of its liabilities were made. The defendant had paid’all the liabilities before this action ivas commenced except a sum of $100 due an attorney, which Avas paid after the action was commenced, but before the order appointing the receiver was made, and tAvo other ■ small debts aggregating $35,, the- non-payment of which Avas explained by the defendant. There Avere some other contingent liabilities, the amount of which had not been adjusted, or the liability of the copartnership ascertained. • In addition to these payments, it appeared that the defendant had paid the plaintiff upon the settlement -of the business about $566. The effect of this agreement was that the property of the copartnership was to vest in the defendant, the plaintiff withdrawing from' the copartnership. Upon this agreement plaintiff’s rights to the assets of .the copartnership terminated upon his accepting the personal covenant of the defendant that the defendant would pay all- the liabilities of the copartnership, and would account properly to him for his interest therein. ' While the plaintiff had a right to bring this action for an accounting and recover from the defendant the amount that this défendant, -under the agreement of dissolution, had agreed-to pay the plaintiff, we do not think it was proper to appoint a receiver of the property which had, under the agreement, ceased to be the property of the copartnership, but had become the property of. the defendant. For this reason we think that the order was improperly granted and should be reversed, Avith ten dollars costs, and the motion denied, with ten dollars costs.
Present — Barrett, Rumsey, O’Brien, and Ingraham, JJ.
Order reversed, with ten- dollars costs and disbursements,. and motion denied, with .ten dollars costs.